GB News Economics and Business Editor Liam Halligan has predicted when he expects interest rates to fall after another inflation drop.
UK inflation fell to the lowest level in nearly three years in April, it was announced this morning, as energy prices continued to cool.
Consumer Prices Index (CPI) inflation slowed to 2.3 per cent in April, down from 3.2 per cent in March, according to the Office for National Statistics (ONS).
The new inflation figure could play a hand in the Bank of England’s thinking when it comes to cutting UK interest rates.
Liam Halligan says we may have to wait for a drop in interest rates
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But according to Liam, we could be waiting a few months yet.
“Here’s the history of interest rates from 2017”, he said.
LATEST DEVELOPMENTS
“Ultra low, rising steadily, then suddenly lockdown came and interest rates were nailed to the floor.
“Since then, we’ve had 13 interest rate rises and interest rates have been at 5.25 per cent since August last year.
“I have to say, I can’t see the Bank of England lowering interest rates in June. When it next meets, they’re going to stay at a 16-year high.
“In my view, there’s no Monetary Policy Committee (MPC) meeting in July, so the earliest at which interest rates could come down again, this is my surmise, is August.
Liam Halligan doesn't expect the Bank to drop interest rates until August
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Rishi Sunak
PA“Overall, UK inflation is relatively low now compared to many other countries. We’re at 2.3 per cent.
“The US is at 3.4. The Eurozone is at 2.4/ The Government will certainly row about that.”
Despite the positive news for the British economy, the GB News Economics and Business Editor warned there is a “blot on the landscape”.
“There are geopolitical dangers”, he said.
“We know that oil prices have been going up. Oil averaged $74 a barrel in May 2023. The current price is $84 a barrel.
“That's 14 per cent more expensive. That is still feeding into inflation. Who knows? With turmoil in the Middle East and still in Ukraine, geopolitical risks mean that those oil prices could spike.
“If they do, inflation will go up once again. It’s true to say inflation is down, but it’s also true to say it’s not as much as expected.”
Prime Minister Rishi Sunak was buoyed by the development, saying this morning inflation is now “back to normal” and “brighter days are ahead”.